Reddit files confidentially for IPO

Reddit, the social-media platform that is home to WallStreetBets and other forums, confidentially has filed for an initial public offering.

• The company, founded in San Francisco in 2005, as of August had a valuation of about $10 billion.
• Along with Fidelity, Reddit’s investors include venture-capital firms Andreessen Horowitz and Sequoia Capital, and Chinese technology conglomerate Tencent Holdings Ltd.
• Reddit said that it had more than 52 million daily active users as of January, spanning 100,000-plus online communities. Its most notorious community is 10.8 million user-strong WallStreetBets, which was at the heart of a trading frenzy earlier this year in stocks such as GameStop (ticker: GME) and AMC Entertainment (AMC).

In recent years, Reddit has been taking steps to grow by investing in areas such as video and consumer products, as well as by moving into international markets. But like many other social-media companies, it’s also been plagued with content-moderation challenges, including how to stop the spread of misinformation and calls for violence.

As of August, Reddit said it had a valuation of about $10 billion after raising more than $400 million from Fidelity Investments Inc. In February, the social-media company said it had raised about $500 million at a $6.5 billion valuation.

Reddit has been looking to build on the attention it gained when at the start of the year its WallStreetBets forum became a hot spot for the individual investors who rallied around GameStop Corp. and other stocks.

The episode brought in millions of new users, Reddit Chief Executive Steve Huffman said in its wake, as well as new advertisers, the source of the bulk of the company’s revenue. He has also said that with an IPO, he would want to make Reddit’s share offering more accessible to individual investors.

San Francisco-based Reddit, founded in 2005, is known for its message boards on an array of topics, plus its “ask me anything” digital town halls with celebrities, politicians and subject-matter experts. The company was sold to Condé Nast in 2006, and the magazine publisher’s parent, Advance Publications Inc., spun Reddit off in 2011 and remains a shareholder.

Over time, Reddit has grown to outpace rivals such as Digg to become a haven for niche communities to gather and a go-to source of news. Reddit had more than 50 million daily users as of January, according to its website. The company aired its first Super Bowl ad the following month and in August it said it reached $100 million in advertising revenue in a quarter for the first time, almost triple the prior-year figure but that it remained unprofitable.